Markup Calculator

How to use this calculator

1. Enter your Cost for one unit, including anything you pay to get it ready to sell.
2. Enter the Markup percentage you want to add on top of that cost.
3. Read the Selling price, the Profit per unit and the Profit margin.
4. Use the table to compare other markups, from 10% to 200%, on the same cost.

How markup is calculated

Markup measures profit as a percentage of what the item cost you. The selling price is the cost plus that percentage of the cost. Margin, in contrast, measures profit as a percentage of the selling price.

Price = Cost × (1 + Markup ÷ 100)

• Price = selling price per unit
• Cost = what one unit costs you
• Markup = percentage added to the cost
• Margin = (Price − Cost) ÷ Price × 100

Because margin divides by a larger number (the price), it is always smaller than markup. A 100% markup gives only a 50% margin.

Example: a $40 product with a 50% markup

With a cost of $40 and a 50% markup, the selling price is $60 and profit is $20 per unit. The profit margin is 33.33%, not 50%, because the $20 is divided by $60 rather than by $40.

Double the markup to 100% and the price becomes $80, profit $40 and margin 50%. The table on the calculator shows how the margin rises more slowly than the markup, reaching 66.67% only at a 200% markup.

Markup versus margin: the common mistake

If you aim for a 30% margin but apply a 30% markup, you will earn less than planned. A 30% markup yields a margin of only 23.08%. To reach a target margin, the required markup is margin ÷ (100 − margin) × 100, so a 30% margin needs a markup of about 42.9%.

Quotes, price lists and accounts often use one term while the other is meant, so confirm which is being used. If you work from a target margin, the profit margin calculator starts from that end.

Choosing a markup that works

• Include every cost you pay per unit: shipping in, packaging, payment fees and returns.
• Check that your markup also covers overhead such as rent, tools and your own time.
• Compare against what customers will actually pay, not only what the formula suggests.
• Use the break-even calculator to see how many units you must sell to cover fixed costs at this price.
• Review prices regularly, because supplier costs change.

Assumptions and limits

The calculator works on a single unit and a single cost figure. It does not include sales tax, discounts, volume pricing, currency changes or fixed overhead. A markup that looks generous on paper can still lose money if sales are low or costs were underestimated. If you also offer promotions, test the result with the discount calculator before you commit to a price.

Frequently asked questions